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US-China Relations

China Times: Primary iPhone Manufacturer Foxconn Setting Up Operations in Vietnam

Major Taiwanese newspaper China Times recently reported that, based on Vietnamese media reports, the primary Apple iPhone manufacturer Foxconn started a cooperative process with the City of Hanoi to establish its manufacturing operations in Vietnam. The move is reportedly in response to the on-going China-U.S. trade war. In fact, in October, the company’s subsidiary Foxconn Interconnect Technology had already completed a US$130 million acquisition of the Vietnamese company named New Wing Interconnect Technology, which is located in Bac Giang Province. Another possible reason for the Foxconn move could be the weakness of the new Apple iPhone sales trend, which has caused concern about reduced supply chain profits. Foxconn refused to validate this Vietnam move, citing its company policy of not commenting on matters directly related to its clients.

Source: China Times, December 4, 2018

Lianhe Zaobao: China Had to Buy U.S. Pork to Fight Swine Fever

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that China has been importing a massive amount of U.S. pork although China is charging punishing tariffs on pork originated from the United States. Highly infectious swine plague is sweeping across China, putting heavy damage on the pork market and industry in China. According to data from the U.S. Department of Agriculture, very recently, Chinese entities placed the largest order for U.S. pork since the beginning of the trade war. The active purchasing moves gave the observers the impression that the Chinese pork market is seeing a significant shortage. This may actually ease the tension between China and the U.S. that the trade war introduced. China is currently charging a 62 percent tariff against U.S. pork. For the week of November 22, purchases of 9,384 tons of 2019 U.S. pork originated from China. This represents a 72 percent share of all U.S. pork export deals during that week. U.S. pork futures increased by four percent.

Source: Lianhe Zaobao, November 30, 2018

Global Times: Three Signals from the China-U.S. Presidential Agreement

Global Times published a commentary immediately after the historic dinner that Chinese President Xi Jinping and U.S. President Donald Trump had in Argentina at the G20 Summit. The presidential agreement can be summarized as follows: one, no more escalation of the trade war; two, no increase of the U.S. tariff to 25 percent on January 1; and three, the two countries should speed up the negotiations on removing the current tariff. This outcome sends three concrete signals. The first is that China’s determination to defend its interests didn’t change; the second is that head of state diplomacy plays a critical role in the China-U.S. relationship; and third, China should remain calm when facing new challenges and should focus on solving internal problems. The commentary concluded that China is no longer the old China of 40 years ago. It is now the second largest economy in the world and no one wants to lose the Chinese market. However, there will still be tough days in the near future and China cannot take the upcoming challenges for granted.

Source: Global Times, December 2, 2018

LTN: Morris Chang Met with U.S. VP Pence at APEC

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, in the afternoon, after U.S. Vice President Pence made a speech to the full conference at APEC, Morris Chang, the Taiwanese representative to APEC, had a high-profile bilateral dialogue with him. This meeting became the highest ranking public official meeting in the history of the US-Taiwan relationship. The conversation focused on the world economy and trade topics. Pence mentioned after the meeting that he will bring back Chang’s suggestion of establishing a US-Taiwan free trade agreement to Present Trump. There have been rumors of a meeting between Chinese President Xi and U.S. Vice President Pence. However, that didn’t materialize. Morris Chang is a Taiwanese businessman and the founder, former chairman, and CEO of the Taiwan Semiconductor Manufacturing Company, the world’s first and largest silicon foundry.

Source: LTN, November 17, 2018

RFA: Silicon Valley Said No to Wuzhen

Radio Free Asia (RFA) recently reported that the Fifth World Internet Conference was held in Wuzhen, Zhejiang Province, starting on November 7. Other than the CEO of Qualcomm, a U.S. chip maker, who attended the Conference and delivered a speech, no high-ranking officers from Silicon Valley showed up. Apparently, this was due to the trade war between China and the U.S. In fact, many of these companies were very upset about China’s continuous dishonest behavior, such as stealing intellectual property from them. This is one of the main triggering causes of the trade war. Some experts expressed the belief that it’s ironic for China, a country that blocks billions of netizens from freely accessing international websites, to host the international Internet conference year after year. Bill Xia, the President of a U.S. internet freedom product (Freegate) company, commented in an RFA interview that China has been hiding behind the ridiculous excuse of “internet sovereignty” to hammer freedom of speech and to apply tight controls over its own citizens.

Source: RFA Chinese, November 8, 2018

The Canton Fair Showed a 30 Percent Decline in Exports to the U.S.

Sofreight, a Chinese national logistics and shipping information site, recently reported that, when the 124th Canton Fair (also known as the China Import and Export Fair) closed, it showed a decline of over 30 percent, to US$279 million, in the level of exports to the United States. Also, in addition to the decline of U.S. buyer attendance, the attendance of buyers from other major economies also saw a significant decline. Compared to last year, European Union buyers declined by 3.93 percent, the U.S. buyers declined by 4.07 percent, and Hong Kong declined by 6.34 percent. The Canton Fair has historically been the primary barometer to measure China’s international trade health. The export level reflected in the Fair was in line with what was demonstrated in the recent Chinese export PMI numbers. In October, the Chinese export orders index under its PMI score reached the lowest point since 2016. According to a Fair internal survey conducted by the Zhejiang Province delegation among their own 4,690 companies that participated in the Canton Fair, over 60 percent of the companies have 10 percent or more revenue dependency on exports to the U.S. Around 15 percent of companies have over 80 percent dependency on U.S. exports. Around 66 percent of the companies surveyed expected an export decline of 10 percent or more.

Source: Sofreight, November 9, 2018